West Suffolk Hospital is to close its existing gynaecology and orthopaedic wards as part of cutbacks to save money and streamline services.

The current 21 beds in F10 will close and gynaecological services will move to a new seven-bed unit on F12, which is currently unused.

The orthopaedic ward on F4, which had 33 beds, will now operate with just 21 beds. These measures are expected to save £600,000 a year.

The hospital is currently battling to save £2.45 million but it will need to find a further £1.27 million to break even.

Over the last two years, it has delivered savings of £11 million by improving the way it works. However, it still has a £12 million historic deficit to pay back by March 2008.

Over the next two years, there will be bed closures and job cutbacks. The West Suffolk Hospitals NHS Trust has already announced plans to cut 100 posts in the coming year - hospital bosses have pledged to try to avoid compulsory redundancies.

The 26-bed closure will be effected through more procedures being done through day surgery - avoiding the need for overnight stays.

Last year, 55 beds were closed and the hospital nevertheless achieved and bettered Goverenment targets for waiting times.

Chief executive Chris Bown said: "We have been freezing posts and managing our vacancies to minimise the impact on staff and it is our intention to redeploy as many members of staff as possible."

This week, figures released by the Department of Health showed that the hospital trust was the seventh worst performing in England with an overspend of £11,833,000 - 12.1 per cent of turnover.

A trust spokesman said: "No matter where we are in the table, it does not alter the fact we have a job to do and that is to get back in balance financially.

"Over the past two years, the trust has managed to save £11 million. This is an amazing feat without dropping major services but we still have a massive target."

David Ruffley, MP for Bury St Edmunds, has called for the scrapping of the Norfolk, Suffolk and Cambridgeshire Strategic Health Authority, which oversees the financial management of health services in the region.

He said: "It is financial meltdown in Suffolk with such overspend because the SHA have never delivered on anything they have promised. Not one single patient in my constituency would notice the difference if it was scrapped."